Last week, the Opportunity Equity strategy declined -1.64%, underperforming the S&P 500’s -1.54% fall (Exhibit 1). The strategy ended the week up 10.92% YTD, or 681 basis points ahead of the S&P 500.
Exhibit 1: Preliminary Performance of Opportunity Equity Strategy Versus S&P 500, Through 11/16/181
| Time Period | Opportunity Equity | S&P 500 |
| Last Week (11/9 - 11/16) | -1.64% | -1.54% |
| MTD | 2.06% | 1.07% |
| QTD | -9.99% | -5.84% |
| YTD | 10.92% | 4.11% |
| Inception (annualized since 6/26/00) | 7.41% | 5.54% |
Source: Bloomberg, Miller Value Partners
Newell Brands (NWL) moved above its 100-day moving average as Board Member Brett Icahn purchased 100,000 shares for approximately $2M. Further, Icahn Enterprises disclosed an increased position in the company, purchasing 5.41M shares during Q3 and bringing their total to 38.7M shares. Ziopharm Oncology (ZIOP) moved above its 50 and 100-day moving averages and announced a $50M private placement offering. Raymond James upgraded the stock to “Outperform” with a $5 price target, 60% implied upside. Avon Products (AVP) moved above its 50 and 200 day moving averages and named David Hernandez as Chief Procurement Officer, effective January 7th, 2019. Pulte Group (PHM) rose above its 50-day moving average despite being downgraded at Merrill Lynch to “Underperform” with a $26 price target, 3% implied upside. There was no news on ADT Inc (ADT).
Exhibit 2: Significant Contributors to Performance, 11/9/18 - 11/16/18
| Name | Type | Return |
| Newell Brands Inc | Equity | 8.9% |
| Ziopharm Oncology Inc | Equity | 27.1% |
| Avon Products Inc | Equity | 6.0% |
| ADT Inc | Equity | 2.7% |
| Pulte Group Inc | Equity | 2.2% |
Source: Miller Value Partners
RH (RH) fell below its 50 and 200-day moving averages, despite retail sales numbers that bounced back in the month of October, advancing 0.8% after slight declines in August and September. Bausch Health Companies (BHC) announced it is expanding its contact lens manufacturing capacity in Rochester, New York and Waterford, Ireland to help support anticipated global customer demand. Amazon.com Inc (AMZN) fell below its 200-day moving average as the company announced it will split its second headquarters between Long Island City, NY and Crystal City, VA. Further, Piper Jaffray defended the stock, citing the core retail business is now trading in-line with traditional brick and mortar retailers after the broad sell-off in tech stocks. The analyst expects continued earnings beats and margin expansion, and sees the growing advertising business as the key to operating income upside. B. Riley reaffirmed their “Buy” rating on Endo International (ENDP) with a $20.50 price target, 64% implied upside. The analyst expects continued gross margin expansion into next year and sees Xiaflex as a growth driver in 2019 and 2020. Teva Pharmaceuticals (TEVA) management stated they are increasingly optimistic that the recent downward generic drug pricing cycle is coming to an end and sees meaningful long-term opportunities in non-US markets. Management also remains confident they will hit their cost reduction target of $3B by year-end 2019. Shares fell below their 100-day moving average.
Exhibit 3: Significant Detractors from Performance, 11/9/18 - 11/16/18
| Name | Type | Return |
| RH | Equity | -9.9% |
| Bausch Health Companies | Equity | -6.9% |
| Amazon.com Inc | Equity | -6.9% |
| Endo International plc | Equity | -5.9% |
| Teva Pharmaceuticals | Equity | -5.1% |
Source: Miller Value Partners
1The performance figures reflect the results of a representative account net of management fee and certain other expenses. For important additional information about Opportunity Equity performance, please click on the Opportunity Equity Composite Performance Disclosure. The performance returns shown in this report are preliminary and are subject to revision. Past performance is no guarantee of future results.
Significant Contributors and Significant Detractors are the Strategy holdings that had the greatest effect on Strategy performance for the week. Holdings that have been in the Strategy since the end of the most recent calendar quarter are identified by name. For information on how Contributor/Detractor data were calculated and a list showing the contribution to the Strategy's weekly performance of each investment held at such quarter end, contact us.
Any views expressed are subject to change at any time, and Miller Value Partners disclaims any responsibility to update such views. The information presented should not be considered a recommendation to purchase or sell any security and should not be relied upon as investment advice. It should not be assumed that any purchase or sale decisions will be profitable or will equal the performance of any security mentioned. Past performance is no guarantee of future results, and there is no guarantee dividends will be paid or continued. Content may not be reprinted, republished or used in any manner without written consent from Miller Value Partners.
©2018 Miller Value Partners, LLC
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